tv Key Capitol Hill Hearings CSPAN November 12, 2013 11:00pm-1:01am EST
thank the entire congress for the work they did on the card act, which our report mandated to congress showed on october 1st has been largely successful at addressing the kinds of concerns they set out to address in the card act. when you all legislate you don't know whether you've got it right, solved the problems, what the effect will be in the market. now four years on we were able to assess that. we cited one, two other studies all with similar message. so to me among the lessons are, number one, when there are problems and concerns how consumers treated in a mark, substantive changes in the law can actually address and eliminate or reduce problems to a considerable degree such as universal default and the way late payment fees were calculated and timed and the way rates were adjusting. a lot of that, as you say, has
saved kur consumers a lot of money. the other thing when we go to save rules or law in financial area to protect consumers we're met with criticism it's going to dry up access to credit. nobody will lend if they have to protect consumers, like it's a horrible, unmentionable, impossible to understand objective. in this case, what we were able to determine was that the access to credit issues were limited. to the extent there was constriction in access to credit parcelled out in the crisis which caused restrictions on access to credit, they were in terms of product lines utilized by consumers, there's still plenty of unused product line. it was cut back in that regard. some intended by the act. there were a lot of concerns about college students going off to college, leaving home, having
credit cards actively marketed to them and getting into credit where they had no apparent income to repay. i remember when i was treasurer in ohio hearing a lot of heartburn about that. that was intended effect of the act to slow down the marketing of cards to young people and it has had that effect. >> i appreciate that. that was a pretty extensive answer. let me in the few seconds i have left piggy back on that, a different card, prepaid credit cards. i had legislation i want to reintroduce again. i believe the bureau is considering possibility of regulatory actions in this arena starting with a request for public comment. this is also a very significant area where a lot of money guess spent and people don't know what they are buying. you have all types of fees
beyond what i believe are necessary, certainly to make a profit. i understand why prepaid cards in that field. by the same token all types of fees from asking for your account balance to cancellation of the card and a whole host of other things above and beyond. can you give us an update on the status of the bureau's work in regard to prepaid cards. what's your anticipate ory time line. >> we discussed your legislation. i expressed my view it's helpful in helping industry understand change is coming in the area of prepaid cards whether by legislation, bureau or regulation, one way or the other. indicating our commitment to engaging in regulation of prepaid cards, they are one of the problem areas in consumer financial protection because they are a hole in the current
fabric. debit cards covered by law for protection, debit cards but prepaid cards are an odd new product and fall in the cracks. that's very problematic because this product has exploded in recent years. i've seen indications maybe as much as $175 billion will be loaded under prepaid cards by the end of next year. so we're playing catchup. it's important we put in place regulations or legislation, either way, that make sure consumers get the benefits of disclosures, they got the benefit of error resolution, dispute resolution, the same kinds of protections they have on debit and credit cards. they would naturally assume on the prepaid credit cards but currently do not. >> thank you. i don't know if you have a quick answer here but for the record maybe you could quantify for us what the bureau has saved consumers through its actions in this country so we can look at a
cost benefit relationship. >> i can't do that today. i don't know the answer to that. i hope and expect over time there will be considerable benefit to consumers. also nonquantifiable benefits like having your credit reports be right, not harassed in the workplace or relatives harassed by debt collectors, other things that go to the dignity of individual consumers that is also important to them. thank you, chairman and thank you director cordray for joining us. quick question about the database senator crapo alluded to. my understanding is on a couple occasions federal reserve inspector general raised questions about data security and controls on data. i'm just won't earthquake, have you or do you intend to implement recommendations regarding data security on this
database? >> we do. by the way, that's not solely the federal reserve's inspector general but cfg's inspector general, they have made a number of recommendations that have improved our operation. this is one of the areas where that is so. yes. >> have you already adopted their recommendations? >> we have been working to adopt their recommendations to understand the basises for them and pay diligent attention you and senator crapo have raised surrounding privacy of this data. >> it's an ongoing process in the works. >> it is. it's an ongoing process. it may be we've implemented all those recommendations at this point. some take more time because they are more complex. we've also been looked at by outside auditors and will be looked at gao in response to
ranking members request. if there are issues we want to make sure we're addressing them. if we're not different from other agencies in this regard, we'll know that. either way we take this very seriously. the fact you all raised this. i understand the agency has to get this right. if we don't, we'll be undermining our mission. >> thank you. i want to go back to something senator raised. they stated, and i'll quote a little phrase here, when use a closed door process to issue guidance and has not gathered input from stakeholders, quality has suffered. i think you alluded to one case where you thought it would not be fair to include it in this critical category which was the issuing of a bullet defining practices unfair, abusive debt
collection prags, ctices, if i follow that correctly. it seems to me the legislation authorizes you to define what are those practices. you did it through a bullet when it might have been done through a rule making process, or do i have that mistaken. could you explain that to me? . there's rule making required when you're changing the law in some fundamental effect or not clear as before. when you're stating the law, not the one of i used but using the fair lending bulletin of last year as an example of clarifying we adhere to the same thinks of laws, fellow regulators. on debt collection a couple of
different bulletins. one we first enforced credit card add ons, basis of a lot of $750 million in relief we've gotten from consumers. we issued a bulletin at the same time around the issue of deceptive marketing. you can try to define that for individual cases but the law is clear. it's the application to the facts that's the issue. that's something that typically has to be done through enforcement or supervisory action. in terms of the debt collection bulletin that you're referring to where we indicated and made it clear what's already clear in the law, reminding, often say reminding institutions that third party debt collectors are covered by fair debt collection practices act but first party collectors are covered by -- had been covered by section 5 of ftc act before, now covered by dodd/frank act and they also were responsible when collecting
debts in their own right for treating consumers fairly in compliance with the processes. we thought that was a mere restatement of the law. some people may take it differently. we are going to, as indicated before, be undergoing significant rule making project in many months ahead on debt collection which will clarify a lot of this further. >> it seems to me it's not entirely retating existing law asked to define practices not defined in the law. i hear the point. my next question actually goes to this next phase, that is to the extent you make it more difficult or costly for lenders to recover portions of bad debts, that is very likely to end up being reflected in higher cost or less availability of credit as a general matter as lenders have to price that
reality into their decision-making process. to what extent do you try to quantify that and weigh the cost to consumers who pay their bills on time and in full. do you do a cost benefit analysis, do you consider that a tradeoff and if so, how do you quantify that cost? >> that is something we will be engaged in in debt collection where we're going to be undertaking rule making as we indicat indicated. we're required when we undertake rule making to consider benefits, cost, burdens of any proposed legislation. what you described in terms of how it could affect pricing, if people end up with a certain amount of debt they can't collect is a kind of consideration will be considered and weighed in that process. >> thank you, mr. chairman. director cordray, as you know
there are nearly 60 million car loans outstanding for a total of $870 billion. for many families the car loan is the second largest loan outstanding. smaller than their mortgage but bigger than their student loans or credit card debt. now, car dealers don't finance most of these loans. instead they often absent as intermediaries between buyers and financial institutions. buyer asking institution about financing, they turn around and ask financial institution for a quote and dealer passes the information back to the consumer. but too often the dealer gives the consumer a higher interest rate than the financial institution quoted and then pockets the difference. one study estimated that these costs aggregate more than $26 billion annually. that's $26 billion straight out of the pockets of working families every year.
other studies found minorities are paying a higher share of those costs. now as you know, the cfpb has the authority to regulate nearly every kind of consumer loan but the big exception is car loans. i know they have indirect ways of getting at this problem. but a recent report from the bipartisan policy center, the report cited now several times recommends congress close the loophole and give cfpb authority to make sure car loans are on the up and up. so my question is do you think that would be good for consumers? >> several thoughts, senator, in response to the question. i think you've laid out actually quite succinctly the kinds of concerns we have in this area. i would simply say when you say dealers get a quote and pass that information back to consumers. in fact typically they don't if
the dealer gets a buy rate for 20%, they don't tell me that. they have 8 or 10 or 12% and not telling me the buy rate i qualified for based on my creditworthiness was 4%. that's one of the concerns we have in this area. the law we have is the law we're working with. when dodd/frank went through and i wasn't in washington at the time and didn't see fascinating events unfolding that led to enactment of that law, there was apparently a compromise struck where auto dealers would not be subject to the jurisdiction of the consumer bureau but instead would be covered by ftc. but auto lenders were explicitly made subject to jurisdiction of the bureau. our efforts were to carry out what we understand to be our responsibility, to monitor the practices of auto lenders who if they set up a program whether either direct or indirect
lending remained responsible for the effects of that program. that's what we're trying to do here. >> good. i appreciate that director cordray. cfpb has done great work and great work in the area as best we can. it makes no sense to me there should be any exception here for consumers who are being tricked out of billions of dollars every year on car loans. i want to ask you about another issue. that is in september, i had the opportunity to participate in two military and veterans roundtables in massachusetts with holly petraeus, head of cfpb head of office of affairs. one issue for veterans is a growing scam involving the v.a.'s aid and attendance benefit, the benefit that helps cover the cost of nursing homes and in-home health aides for our disabled vets who don't have
many resources. now, from what i understand the details of this scam are really grisly. a company offers to help a veteran sign up for the benefits. if the company determines the veteran has too many assets to qualify for the benefits, it tries to hide some of those assets by moving them to irrevocable trust or annuity that not only violates the spirit of the program, it often ends up hurting the veteran. the company generally charges huge fees, takes a fat cut of whatever financial product they end up selling to the veteran and moves the assets where the vets can't easily reach them meaning the veteran is actually in much worse financial shape than before the person applied for help. i understand one case where a veteran got set up with an annuity that wouldn't start paying out until he was in his 90s. can you tell me what cfpb knows
pout these scam artists and what congress could do to help stop them from preying on older veterans? >> thank you for that question. assistant director petraeus has seen these issues and educated all of us at the bureau about them, not just in massachusetts as you note and as you know but all over the country. these kinds of efforts to prey upon what are seniors, also veterans, are beyond reprehensible. we think there are things we can do as a consumer bureau particularly working with state attorney general who has been pretty aggressive in the area and will continue to be if we highlight issues and problems for them, the state of washington, attorney general took a very helpful action on this. so has the state of oregon. we're going to try to coordinate others. in terms of what congress could do, i haven't thought that issue
through. but anything you can do i think would be welcomed by us and others. we want to stamp this out and make sure people who are entitled to benefits, precious benefits that aren't that extensive under the law as it is, they have earned by serving their country are not going to be stripped of those by frauds and scams of the kind we see in lots of markets but it one in particular. >> thank you very much. the aid and attendance benefit is a significant way we show our v veterans our appreciation. they are turning the benefit into something that undermines the financial security of our older veterans. i hope we can find -- i want to find a way to put an end to them. thank you, mr. chairman. >> senator moran. >> mr. chairman, thank you very much. director cordray, thank you for being here and the opportunity to ask you a couple of questions. you're aware in regard to
automobile financing a number of us sent a letter to you to consumer protection financial bureau, that letter was dated october 30th. it was signed by 21 or 22 of us requesting information you've responded. thank you for your response. but i want to follow up and see if you can provide a broader answer and perhaps a more specific answer. what we ask in that letter was for details concerning the statistical methodology the bureau employs to determine whether dispariate impact portfolio methodology for each group of consumers the bureau has examined. what i know is that the borrowers don't self-identify. they don't say their gender or their race. you are using, the bureau is using a proxy to determine those
criteria. but apparently a conclusion has been reached there is discrimination or disparate finance charges based upon those characteristics. you describe in the letter back to us the nature of that analysis. but one of the things we ask for is the evidence that that use of the proxy is providing an accurate methodology to reach the conclusions that you are reaching. has there been analysis done to demonstrate that the proxy is providing accurate information for which you are now basing decisions on? >> yes. thank you, senator. it's a somewhat complex area. however, several things. number one, we are using an approach that is sort of time honored and well tested both in social science literature and by
the justice department and our fellow regulators. there was a webinar which the head of our fair lending participated with federal reserve and proxy methodology they use is very similar to ours, ours is refined in a couple of respects. they are not exactly the same but very much in harmony. we're going to be having as i said now in response to some of the concerns raised by you and others an auto forum on thursday in which more of this will be aired out and the major players in the industry will have a chance to probe issues with us. again, our approximatel methodology is something used not just in these kinds of lending cases but in a variety of other cases, employment discrimination cases and others and is considered to be state-of-the-art. people may have their issues with state-of-the-art. we're not embarking on some novel or untested or brand-new
approach here. >> let me see if i understand what you're telling me. the approach, according to what you're saying is -- i've been around a while. it's regarded, considered to be accurate. has the bureau done specific analysis on the data collected to confirm that in this case? >> we have scrubbed the proxy methodologies that are used. we've refined them to some degree to include elements of census tracked render precise data. i want to be careful to talk about what we found. this is an ongoing investigative effort where we're working with the justice department. so the order of the day on those things is confidentiality unless or until you get to the point of taking some sort of public action. so i wan to be a little careful about not preaching that. but yes, we have looked very
carefully at what we're doing and trying to understand prior approaches that are approaches in line, that that approach is accurate and calibrated to the >> understanding that anything we do could ultimately be tested in court and court would have to have confidence in our methods. >> i was going to critique the idea of having a financing seminar on thursday, but you eve already responded by saying it's a result of our inquiries that you're doing it. i was going to -- >> if you have any suggestions, feel free to make them, yeah. >> earlier in the process might have made more sense. >> maybe. >> but if you're giving us credit for raising these issues and, in response, you're having thursday's program, you've somewhat taken the wind out of my sales. it does seem to me that this is the kind of conversation that should have taken place before this week. >> i'll just say, one of the
complexities for us and senator warren eluded to the issue, under our statute, what's very clear is we do not have jurisdiction over autodealers. we do have jurisdiction and understand it to be a responsibility under the law to monitor and oversee autolenders. that's complex for us. we don't want to be misperceived as somehow trying to extend our reach over autodealers which congress very carefully put on one side of the line. however, we don't feel that we can fail to exercise our duty with respect to autolenders who are on our side of the line. so the reaching out we might have naturally done has been difficult for us because we don't want to be greeted by there they go, they think they now control autodealers. we know that we don't. we're trying very hard to observe the line congress true. it's not a natural line, as senator warren mentioned. but it's in the law and that's something we're trying to be careful about. >> i appreciate that difficulty.
let moe just poent oint out again, in this arena, what senator toomey was trying to address in a broader sense, i want to make certain that there will be analysis about the increasing costs or the increasing interest rates that may be charged consumers if you move to a flat-fee financing system. under the theory that, as senator toomey said, consumers will pay for those increasing costs. and we -- i assume that you would confirm that analysis is necessary to avoid increasing the costs so that consumers don't, while your efforts may be to eliminate discrimination, if fewer consumers can borrow money
to purchase a car, we've done a lot of damage to consumers and to the economy. >> i think that's a fair point. it's the same point that we ran up against as we wrote our mortgage rules. you want to impose the right protections, make sure people are treated fairly and particularly want to make sure that they're treated in a nondiscriminatory basis. but we don't want to dry up access to credit. i will say, and i think it's notable. people have been reacting to our fair lending bull tietin on autolending going back as far as the spring and concerned about what the impact may be, the autolending market is red hot right now. we're selling more cars than we have in a number offiers. i believe that will continue. we cheer that on at the consumer bureau. for a lot of people, autos mean opportunity. it means being able to get back and forth to work. its's basic functional part of
existence, being able to get around. and we understand that credit means opportunity for a lot of consumers if it's used responsibly. we also want to make sure that when a consumer goes in to get a loan to buy a car that they aren't unwittingly being forced to pay more based on assumptions made about their racial or ethnic background. and i think that's a very bedro bedrock, american principle, as welt. we'll be taking great care as to how we move forward here. but we think that there are some key core american principles at stake. >> senator ritter? >> thank you, mr. chair. and thank you, director, for being here. i want to go back to a topic that several members touched on, which is the massive data collection your agency is in the midst of. and i apologize if i repeat any questions. but i cothink it's important.
so i do think it merits the time, at least. during your april 23rd appearance before us, i believe you asserted clearly that cfpb is not collecting personally identifiable financial information about consume rs. is that correct? or incorrect? >> no, i don't believe that i said that because that's not, in fact, correct. there's some very limited areas where we do have a certain amount of personal, identifiable information which as you know is a term of art under federal law. consumers come to us and they provide personal, identifiable information in order to make a complaint and have it be processed. they give us their name, they give us their address, they may give us their bank account information or social security number, whatever is necessary to process that complaint. and it's very important for us to make sure that that
information is safeguarded from a security and a privacy standpoint. and we've been as careful as we can to do that. >> but what about other broad categories like information you collected about credit card transactions or mortgages. >> that information is de-identified, as apparently a it term of art. we are not interested with the credit card data. a ranking member and i had a colloquy about this earlier. we don't need or want to know what you and i or other individuals are spending or what our patterns of behavior are. what we're looking for is the kind of information that will allow us to oversee the financial institutions. how they're treating their customers. are they complying with the law? what is the pattern of late fees and interest rates. it's the same data we used to fulfill our responsibility to congress. you all mandated that we do a report on the state of the credit card market and the e k
effects of the card act. >> say all the data you collect about mortgages or credit card accounts s none of that searchable by personally identifiable information? >> my understanding is that none of that data has personally identifiable information. and therefore, not be searchable by it. that's correct. that's our intention, and i believe that is, in act, the case. >> i look at what appears to be conflicting information. can you go and double check that and report to us in the record by listing exactly what categories do have personally identifiable information? and what other categories do not have personally identifiable informs. >> yeah. >> so, as i'm sure you would imagine, this is an issue that people worked to prepare me for carefully for a hearing like this. the two areas where we have some
personally identifiable information are the consumer complaint area, where it's inevitable. that's what it is. it's an individual identifying their personal situation so that we can seek to acress it. in the supervisory area, we end up with personally identifiable information. if we're cleaning up a list of consumers who were victimized by the practice to make sure that relief is going to the right individuals, that sort of thing, some of that is just necessary. but in terms of our data collection, which is i think the focus, if i understand it, of some of the sensitivity that we're supposedly collecting this mass amount of credit card informers or medical report gablg information. all of those efforts are done to monitor on an anonymous, de-identified basis. again, we're not interested in. it is not part of our effort to understand what an individual consumer is doing or somehow track or follow their practices.
that's just not help vl for us. if we had, it would only complicate our efforts there. rather than just shooting in the dark, that's essentially what we're trying to do there. >> if you can supplement for the record, the complete lists in each category. just so we know that this is the exhaustive list where personally identifiable information exists, i think that would be very helpful. >> i think we may have done that. but i'm happy to have my staff work with viewers or if there's questions for the record here to, again, always be as responsive as we can. >> thank you. >> senator, one more question? >> thank you, mr. chairman. and i just want to follow up on the question that senator ritter just asked. let me tell youmy understanding is, director.
there are approximately nine institutions required by the cfpb to submit invest on credit card transactions. we've estimated that that's about $900 million. i'm not asking you to confirm that number, unless you will, today, but as that data is clerkted, it is not amoanonymou not de-identified. it's the whole story. that information is then transmitted to a third party who you have contracted with who then goes in and de-identifies it or makes it anonymous. and they create a personal identifier for each one of those accounts that is not -- it's a number. it's not the name of a person. am i correct so far? >> i believe that may be correct. but understand, nunl of that is new. if you're talking about arcas, which is a private firm that collects this information for
credit card companies themselves and also has collected it for other regulators, again, the point is no investigation that arrives at our agency is permly identifiable. all of what happens before anything comes to our agency has been happening for quite some time. and we're simply contracting for the very same processes that have been used again and again. >> i understand that. and, as i said earlier, when we talked about this. i'm quite concerned to find out that you're not the only ones doing this. but the fact that you are collecting the full data set, you are then having it deidentified. means that someone could duoin and then reidentify. and the question isn't so much about your motives, director. i fully trust your motives ch. s
but as we recently saw, we don't always have that kind of absolutely airtight security and protection about the data. and, in fact, an agency director could someday decide that he or she wanted to use that data. that's why we wrote it into the statute. my concern is that even though you have, and i appreciate it, contracted with argas, to deidentify this data, the fact is you have the data. or you've given it to argas and argas is your agent. >> the credit card companies have given it to argas. >> but they've given it under an order from the cfpb.
>> i wachbt you to know you're right in your concern. we'll be glad to let them see everything they need to see in order to make an assessment of what they're doing. if i were the head of thiss agency, there is nothing stupider that i could do. that is the lags thing that i would ever want to do and any of us working the agency would want to do. we need data information. in order to be able to keep up with and oversee and ensure compliance with the law base, some of the most powerful financial institutions in the world. we need data to be able to proceed in the area of public policy. as for knowing what any individual is doing, in terms of buying something at k-mart or
going on line, i don't care in the least about that. what we're trying to do is identify the patterns of how institutions treat their consumers. >> again, as i said, i understand and appreciate and trust your motives. we've had experiences recently and other agencies where fe father or motheral abuses of this kind of information were undertaken. as i see it, all is necessary. for this phenomenal amount of data to be made available is for someone to unlock the key that the third party contractor has put in place. that's the only barrier that i see. the data that we need and is now
collected with enforcement power i see is different. i still agree that at least there are concerns with this happening in other contexts. but at least when the federal government steps in, with its ability and its force and authority of law, i think that elevates the concern. that's all. >> and, again, you're right to be concerned. you're right to point out that there have been problems and issues in the government, really at all levels. i saw it in state government as well, at times. i don't want there to be concerns about this agency. we welcome the gao review. i want to make sure that you're satisfied. i want to be sas fied in these fronts. i share your concern. and i do think it would undermine the mission of our agency if we were seen to be and were cavalier about security or privacy and we ended up with one of the problems of the kind you'd describe. so everything you do to scrub us and to make sure that we're performing up to snuff in this
posses non--- nominee to take over as the federal reserve chairman testifies at her confirmation hearing. live coverage thursday at 10:00 eastern also one sees and three. c-span three. class we look back on the life and death of our 35th president. beginning saturday at 1:30 p.m. .astern plus, and authors panel relives november 22, 19 53 all part of book tv this weekend on c-span two. do not forget book tv posses book club for november wants to know what books you're reading. post your thoughts in our book club chat room. >> president obama announced tuesday he is nominating timothy to be chairman of the commodity futures trading commission.
he served as assistant treasury secretary for financial stability and had overseen the troubled asset relief program. the outgoing chairman is gary. >> the president of the united states accompanied by gary and timothy. of one of the worst economic crises in our history. catastrophe on wall street was rapidly fueling a punishing recession on main street. were looking over the horizon and seeing a potential for a great depression, not merely a great recession. get our economy
and put people back to work. one of our top priorities was to make sure a crisis like this never happened again. historic wall street reform that put in place smarter and tougher and common sense rules on the road to protect consumers and end taxpayer funded ls once and for all. five years later, our economy is growing. our businesses are creating jobs. our markets have hit record highs and there is no doubt our financial system is more stable. a big reason for that stability is the work of a small but mighty independent agency, the commodity futures trading commission. [laughter] the cftc has many responsibilities. under wall street reform, one of them is to guard against some of the most reckless and irresponsible practices at the heart of the crisis. this includes making sure big
tanks cannot make risky bets with their customers deposits, something we call the vocal role. it also includes oversight of risky trading in derivatives. some of the complex products that were part of what precipitated the crisis five years ago and products warren buffett once called financial weapons of mass destruction, even before they nearly brought down aig and sparked the financial wildfire on wall street. protectforms will consumers and make financial systems stronger and more competitive. helping to restore confidence in our markets. confidence markets around the world depend on. that is why the cftc has worked tirelessly to implement those reforms. they neither resources and the regulators to finish the job and that is why we are here today. when i named gary to lead, i had
not even taken office yet. and a halfut a month into my transition. our economy was bleeding 800,000 jobs a month. nobody knew where the bottom would be. sat downat time, gary with tim geithner, who would become my treasury secretary, as well as a chairperson of the fcc, and began sketching out the early outlines of what financial reform would look like. ever since, gary has worked tirelessly to make it real. he has one of the smallest budgets, but he has done as much implement to financial reform. under his watch, the cftc has transformed what was a secretive and shadowy derivatives market by bringing large parts of it onto exchanges to transparent training. cftc is working hand-in-hand with other agencies by implementing the vocal role, which secretary luis called on
to complete by the end of the year. compose 1.8fully billion dollars in penalties against financial firms that engaged in rate fixing schemes. they worked to make sure and irresponsible few cannot hurt consumers by illegally manipulating energy markets for their own gain. while ae done it all swarm of special interest lobbyists have done everything possible to sort their every move. once let his team forget what this is all about. the american people. we are so privileged to serve. before i introduce his successor, please join me in thanking gary for his outstanding service.
[applause] bunch of cftchole people are here. we want to congratulate you. my working assumption is much of them will be here even after tim goes and does whatever he does next. because, the next person who will be taking over will need a whole bunch of outstanding experience regulators, some of whom are in this room. the man i have chosen to succeed gary is timothy. in the past few years, tim has been charged with the thankless task of winding down a program no one ever particularly liked. the troubled asset relief program, also known as tarp. quietly very successful at it. resident bush rightly began this program to stop the downward spiral in late 2008. we continue the effort, modifying the program to rescue
the american auto industry as well. under tim's watch, not only the banks that have benefited repaid every single dollar, but he secured a positive return of nearly $30 billion to the american taxpayer. he has worked tirelessly to moreve oh grams that help struggling homeowners stay in their homes. more communities are move the plight of homes from their communities. he has launched new online towards -- tools to allow americans to track where the funds went and when they were repaid eerie that is a commitment to transparency and openness i know he wants to continue. tim started a treasury as the right-hand man to his predecessor, who passed away earlier this year and was an outstanding ceo as well as public servant, and whose work guiding our financial stability reforms we honor today. tim was the right man to succeed
her and with a record that reflects a deep commitment to a reform agenda, which is why he is the right man to succeed gary as well. tim is a guy who does not spotlight but consistently delivers. he gets a high return for american taxpayers, without a lot of fanfare. i have every confidence he is the right man to lead an agency designed to prevent super court -- future crises because he never wants to have to manage something like tarp again. [laughter] i just found out his lovely mother skydived on her 80th birthday, which, to me, is just very cool. of him rightroud now, also. i urge the senate to confirm tim as soon as possible. right into the vital
work of protecting america's economy and the american people. and i would urge economists to give tim the resources it needs to do the job. wall streete passed reform, its opponents have tried to starve funding for the agencies responsible for carrying it out. are chargedwomen with protecting us from financial harm. they are undermanned and outgunned and working overtime. sequester cuts have made it even harder for them to do their job and they have lost five percent this year. gary recently announced some have to drop open enforcement cases because congress will not allow them the resources required to do their jobs and complete these cases. enough like not having cops on the beat and not having enough prosecutors to prosecute crimes.
this makes us safer and makes our financial system work better. it is foolish for us not to have an equivalent resource. a republican leader in the senate said a while back the less we fund these agencies, the better america will be and that is just not true. we know it is not true. we have got the scars to prove it given what happened in 2007 and 2008. that is why we cannot let an army of lobbyists and their allies to delay the rules designed to protect consumers and protect a crisis from happening again. we cannot go back to the days when bad behavior could barely bring down the entire economy unless taxpayers stepped in to rescue it. anybody working hard to dismantle these reforms will have to explain to the american people why they did that when and if a crisis ever does happen again.
it is important to realize financial reform is not about punishment but about making sure everybody plays by the same set of clear and transparent rules that encourage responsible innovation and competition and discourage fraud and protect the american people. and, these regulations can work when people allowed to work. let me give you an example. one of the things we did was pass a credit card bill of rights that impose a new standard of fairness on credit card companies. that means a simpler bill with no more hitting seats -- hidden ofs and no more shifting deadlines or any time any reason rate hikes. that was not designed to punish credit card companies. they provide a valuable service and deserve to turn a profit. a recent study showed the new protections are saving consumers more than $20 billion a year.
the men and women who work for agencies like the cftc, charged with financial risk harm and consumer protection, this is the work they do. save consumers money and prevent systemic risk from happening again. they have exposed deceptive mortgage schemes and abusive debt collection practices that prey on americans, they have partnered with states to secure a $50 billion settlement for 600,000 homeowners targeted by the mortgage schemes. the new consumer watchdog agency empowerp is working to students and veterans and families with straightforward information they need to make sound in choices they need like buying a home and paying a college -- for college. it has secures $700 billion for refunds for 8 million hard- working commit -- american unfair andbused by abusive practices. that is what financial reform is all about and that is what a functioning cftc is all about.
protecting hard-working americans by making sure everyone plays by the same set of rules and preserving trust and the integrity of our markets and financial system, preventing a crisis like the one we endured from ever happening again. the american people have sacrificed too much to go back to the old days. our economies are growing and businesses are creating jobs. those of us who have been sent here to serve should be doing everything we can to strengthen the middle class and strengthen the middle -- financial markets and rebuild an economy where everybody has a chance to get ahead. that has been what gary has been up to the entire time he has served. we could not be prouder of the work he has done. as soon asent congress confirms tim and allows him to carry on the important work, he will be carrying those values with them with the have at thiseam we
agency. thank you for being great public servants. good luck to you. tim, congratulations. [applause] [captions copyright national cable satellite corp. 2013] [captioning performed by national captioning institute] "washingtonxt journal," we will talk with charles dent and get his take on the house-senate budget conference. this week's house health care vote to keep their insurance coverage, and a measure to make it illegal to discriminate against gays and lesbians in the workplace. then, democratic senator ben cardin. and, as part of our spotlight on magazine series, a look at recent investigative piece from the atlantic about whether or
campaign cash translates into more votes. live each morning at 7:00 eastern on c-span. coming up in a moment on c-span, the pentagon talks about u.s. assistance to the philippines. george little is asked about h r dr. later, former president bill changes to thee health care law should be made if it will help americans keep their existing coverage.
>> first, thank you for your -- putting up with us. you talked about the response to the philippines and on the budget. you talked about the cost of the response. we have been hearing about how the military is not going to be able to do multi-shift responses because of the budget cutback. how much is this costing and is this something we will not be >>e to do in the future? thank you for your kind words. on the assistance we're able to provide to the philippines and the cost, i don't have a precise estimate. obviously this is a fast-moving train. and our first priority is assist the people of the philippines. we'll come to the cost estimates later. it does carry costs by i don't have the figures. we are committed as a department and government to supporting hadr efforts in the asia-pacific region and around the world.
this has been a key priority in the secretaries' travels to the asia-pacific region and has been a focus elsewhere, up as in south america. this is something we're prioritizing and something we know is becoming of increasing concern. also on this very point, hadr is critical in that we help build partner and ally capacity. that's one of our main priorities as well. is helping others help themselves through these kinds of crises. naturally we stand ready to assist wherever we can, especially in areas like the philippines. a treaty ally. but i don't have cost estimates for you today and -- but we'll develop those as time moves on. >> as a quick follow-up. it took a couple of days for the orders to come, to get the ships under way. was there a cost related reason for that?
was there a reason that -- were we waiting for some particular request or -- >> well, i would with respect take issue with the premise of the question, we moved as soon as we received a request from the government of the philippines. we started moving personnel. this has been a tragically developing situation, obviously, and it takes a little bit of time to define requirements and what assets you have to bring to the table and capabilities that may be required. but make no mistake about it, we moved out as quickly as we could in the wake of this terrible storm. barbara. >> so why not send the amphibious ships that general kenny says he needs that capability as soon as possible? >> we're not ruling in or out any capability that's needed to support our philippine allies as they sort out these very terrible situation. the nearest arg is in japan right now. i'm not ruling out the possibility that they could be moved to the philippines at a certain point.
but right now we have a significant array of assets, as i described in my opener, to bring to bear, to assist. and that's precisely what we'll continue to do. and, that is what we will continue to do. have one thing that none of the other ships do. that is the ability to deploy vehicles and small boats to help the search and rescue and to move supplies to affected areas. -- e needs that capability, >> we are working very hard to get him whatever he needs to support relief efforts in the philippines. that is in consultation with the state and philippine government. want to do this well and we will continue to define requirements through the command to make sure that he has the full support of this department.
>> talk about the ospreys. what do you think they will be used for? >> i do not have a specific task right now. mixs a key part of any we might send because they have the ability to going quickly and have longer range. they have been brought in other situations like this and we will continue to see what they can be used for. i do not have a precise operation to announce today that is specifically geared towards the ospreys. >> is it because of their landing capabilities? >> i do not know. aircraft can be used in these situations.
we will learn about what they can be used for. >> can you go into detail or give examples of the support that the special operations task force in the fold beans could provide to the mission? i know that they do a lot of smaller types of things. the specificsve on the role that they will be playing. note that it is tough for me to get into the specifics you guys this is a very fluid situation and disaster relief efforts are not something that in can necessarily, uh, work a linear fashion and you have to look at them as they come up. we work closely with the philippine government. is important to bear
that in mind. the key principle is to do everything we can to have support and relief efforts and parameter -- in consultation with the philippines government. whether it is on the ground or with other assets. relief supplies are intended to help 10,000 families. where are they located and how will they get the families? delivered anding are currently at a warehouse in dubai. elsewhere foryou precise timing. i do not know who will be involved in other shipments. we will look at that closely as
it comes in. >> can you tell us what the status is of the two hospital ships? >> i do not have any details on that. that is a good question. reports that the philippines had asked 40 times four u.s. military help? is that accurate? philippineshas the how many times has this philippines sought help since the closure of that military base? >> we have worked closely with them on exercises. relationship that we will continue to nurture.
it is important that we do everything we can in this terrible situation. >> elizabeth ward is part -- war and -- warren. tehran on the nuclear program. to reach as failed agreement on curtailing the program. here is part of the briefing. >> let me give you an over view. >> he will be briefing the senate banking committee tomorrow. he has been updating members of includes he this
believes that consul tatian -- he has spoken with senators over the last week he has been making calls over the weekend. given threen has briefings on the hell. -- hill./ we are closely engaged with congress. in terms of the question of sanctions. the secretary will be clear that putting new sanctions in place would be a mistake while we are determining a diplomatic path
forward. what we are asking for is a temporary pause in sanctions. we are not taking away sanctions and we are not rolling them back. our is about ensuring that legislative strategy is running and enhanced. that theyirman said would like to see new sanctions. >> he will be consulting and briefing a range of members and that will continue as part of the briefing tomorrow and with phone calls throughout the week. >> next week? or further down? the goal is having our negotiating strategy and our legislative strategy running hand in hand.
it would be for that length of time and we are hopeful to narrow the gaps next week. we will have a temporary pause with that goal in mind. says thatinton president barack obama should find a way to let people keep their health care coverage, even if it means changing the insurance law. asked aboutuse was bill clinton's comments in tuesday's briefing. want your reaction to a comment. he said that president obama should honor his commitment. does the president agree with the comment? >> i think as you saw the president say in an interview with nbc last week, the answer's yes. the president has tasked his team with looking at range of options to make sure that nobody is put in a position where their
plans have been canceled and they can't afford a better plan even though they would like one. you heard the president address this very issue in his interview last week. and i think it's important to note that president clinton in that interview also said, and i quote, the big lesson is that we are better off with this law than without it. and he said, quote, the enrollment period did not come off well because the national website wasn't ready. but this happened once before. it happened when president bush put in the medicare drug program for seniors, which was not as complicated but had the same problem with the rollout. it was a disaster. there were people that lost their prescriptions for their existing medicine and they fixed it. the president, as you know, has pledged to ask his team, tasked his team to look at potential actions that could be taken to address this problem. because his focus is on making sure that people get quality and affordable health insurance.
>> what the president said appears to be different from what president clinton said. president clinton is talking about anybody who is losing their plan, what the president said and officials said was they were focused more on people getting cancellations and weren't getting subsidies to cover higher premiums. is what president obama looking at more narrow than -- >> certainly the point we have made is that for more than half of those on the individual market who, because their plans were not grand fathered in, they did not exist, or were not participants in those plans prior to the passage of the affordable care act, more than half of those individuals will have higher quality insurance with better basic protections at the same or lower cost. roughly half, maybe that is roughly half, more than half will qualify for subsidies. some will qualify for medicaid in those states where medicaid has been expanded. for the universe of people that smaller group of people within that 5% of the population for
whom the fact they have gotten a cancellation notice because they purchased plans in the last couple years that do not meet the minimum standards and they are facing challenges in terms of affordability, the president has asked his team to look at that problem. that goes to the point he made about the vast majority of americans here who, if they are an employer, provided insurance or medicare or medicaid or v.a. will not have any changes if they don't want them. the only changes they'll see have to do with improvements to benefits. >> another point on health care there are a number of reports out about the enrollment numbers. putting them at about 40,000 to 50,000. can you confirm that those numbers are accurate? if not, can you tell us when the administration expects to put out numbers?
>> i cannot confirm those numbers. there have been a variety of reports saying a variety of different things. the administration will be releasing data about enrollment in the middle of the month. i anticipate it will be later this week. as we said all along, consistent with the way that data like this is released for other programs, so i would add two things. first, it was always the case, even prior to the problems with the launch of the website, that enrollment in the first month would be low. that is the experience we saw in massachusetts, and it is the experience we expect here because -- especially for healthier, younger people, the pattern of behavior is to shop around, to wait before you purchase when you don't have to purchase before december 15 in order to have insurance on january 1. which is the earliest possible date for coverage.
so we expect that pattern to play out with the marketplaces in the affordable care act. secondly, the fact the website has been so challenging and problematic in that first month means that the enrollment numbers will be even lower than expected. but beyond that i don't have specific figures. i have not seen specific figures. but i anticipate that we will be releasing data about enrollment by the end of the week. >> you don't have a specific date? >> i do not. mark. >> the president spoke last week about gaps and problems with the rollout of the website that needs to be fixed. what are those gaps and what -- >> he was referring to, and i'll quote, i assigned my team to see what we can do to close some of the holes and gaps in the law. he was addressing the issue of cancellations and some of the concerns that he has about individuals who have their existing policies canceled. that issue has gotten a lot of attention. the problems with the website, which you just mentioned, are
being addressed by a team of tech experts, as well as by jeff who is overseeing that team. and they essentially have a punch list of problems that need to be fixed in different areas of the website. and they have been working through that punch list. and making progress. gradual progress each day. there's no question that the website is functioning better today than it was a week ago or 10 days ago. and certainly much better than it was in the first two weeks of october. but there is more work to be done as he said. that work continues. our goal is to have that website functioning effectively for the vast majority of americans by the end of this month. >> if it's not up to par by the end of the month, do you have a plan b in place? >> we expect it to be functioning properly and effectively for the vast majority of americans by the end of the month. what we have been doing since the issues of the website arose has focused -- we expanded our
efforts to create ways through which americans can get more information about the options available to them. both by in person consultations or over the phone. they can also apply and enroll by mail. so those efforts continue. but we expect, and i'm citing here, those closer to the ground that the site will be functioning effectively by the end of the month for the vast majority of the users. i think i said last week and i will reiterate that any website of this size and complexity will occasionally have issues with it.
that's true of major websites today in the commercial sphere. but we expect it to be functioning effectively for the vast majority of users so that he they can navigate through it, so that they can navigate through it, review their options, find out whether or not they are eligible for tax credits and choose coverage that fits their needs, both their financial needs and their coverage needs. >> can you say whether -- >> i can say a couple of things. first of all, i'd like to point out the administration's extraordinary cooperation with the six separate congressional committees currently conducting oversight into the affordable care act. as you have all seen and covered, administration officials have testified at numerous committee interviews and briefings, and they have testified at more than two dozen congressional hearings, including four in just the last two weeks. the administration has also produced thousands of pages of documents and our cooperation on these issues continues. the subpoena issued by house republicans on friday is an unfortunate and unnecessary step
since we made clear several times that many todd is willing to testify. the issue for us is not a question of if he will testify, but when. we had hoped the committee would work with us to find an alternative date to give mr. park time to focus on his immediate task at hand, which is getting the website fixed. this is a goal that is ostensibly shared by the very house republicans now demanding his appearance on wednesday. an appearance that would take him away from his work on the website. in fact, chairman issa told cbs news a few weeks ago that he wanted the website fixed and fixed quickly. well, todd park is very much engaged in the effort of fixing it as quickly as possible. i have no update on that except to tell you that the office of science and technology have said they are reviewing the subpoena and they will respond as appropriate.
>> iran, iran's foreign minister has rejected the claim that iran that was the result of the failure to reach an agreement in geneva recently, and said divisions among western nations were the cause of the failed talks. can you comment on that? >> what i can tell you is simply that the p five plus one were unified on the proposal put forward. and that the iranians did not accept that proposal. that's a statement of fact. there was important progress made at these negotiations, and they were cordial and substantive and serious. but as i said, the p five plus one were united there and we remain united in our proposal to iran and our approach to these negotiations. gaps remain and there are still important issues to be addressed between the p-5 plus one and
iran, and that's why there will be a break, as you know, and the p-5 plus one will resume negotiation was iran on november 21 and 22. i want to caution everyone because there's been a substantial amount of speculation about the details of the proposal against believing rumors and incorrect reports or prejudging outcomes. both p-5 plus one and iran have been very disciplined in keeping the details of the negotiations private and that is the sign of the seriousness of what is taking place and allowed us to make the progress that we have made. so we are not going to get into
details about our negotiating positions. but to be clear the purposes of these negotiations is to prevent iran from acquiring a nuclear weapon. i think that's important. there's one objective here. the reason why we are here, the reason why negotiations are taking place, is because of the very focused effort in building an international consensus and building a punitive sanctions regime around iranian behavior and around its refusal to comply with its international obligations. because of that effort, over the several years since it's been in place, we now have a diplomatic opening. we have a willingness because of the concentrated effect of these sanctions by iran to pursue the possibility of resolving this diplomatically. resolving this diplomatically is the best way to resolve it. it is the responsibility of the president to pursue a diplomatic opening. because the best way to ensure that iran does not acquire a nuclear weapon is to achieve an agreement through diplomacy. an agreement that's verifiable, that's transparent, and that requires iran to take concrete steps. the alternative is military action. the president has never taken any option off the table, and he does not now and will not. but it is his responsibility as president to pursue a diplomatic
opening, to see if it is possible to resolve this issue peacefully. >> is there any assurance that secretary kerry can he provide lawmakers on the hill that will persuade them to hold off on tightening sanctions? >> secretary kerry and undersecretary of state for political affairs, wendy sherman, are briefing the senate banking committee tomorrow. that's part of a broader effort to consult with congress and update them on the p-5 plus one negotiations, as well as our consultation was our allies. when it comes to the issue of new sanctions legislation, it's important to remember, no one is suggesting an open-ended delay for new sanctions because there may come a point where additional sanctions are necessary. at the same time, it is important for congress to
reserve its ability to legislate for the moment when it is most effective in order to give the current p-5 plus one negotiations the best chance to make real progress in achieving our shared goal. of preventing iran from obtaining a nuclear weapon. again, this is not about being for or against sanctions. this administration has imposed the most crippling sanctions in history against iran, and we appreciate the leverage those sanctions have given us and we appreciate the partnership that congress has given us in that effort. but this is a decision to support diplomacy and possible peaceful resolution to this issue. the american people justifiably and understandably refer a peaceful solution that prevents iran from obtaining a nuclear weapon. and this agreement if it's achieved has the potential to do that. the american people do not want a march to war. it's important to understand that if pursuing a resolution diplomatically is disallowed or ruled out, what options, then,
do we and our allies have to prevent iran from acquiring a nuclear weapon? we said all along as we have ratcheted up sanctions and increased the isolation and pressure on tehran, that the window for resolving this diplomatically was opened, but that it would not remain opened forever. and short of an agreement, iran will continue to make progress in its nuclear weapon. so we need to pursue this. we need to see if iran is serious. and any deal that we and the p-5 might reach with iran will be one that absolutely meets our standards that would be verifiable and concrete. any initial release as part of the first phase would be reversible and modest.
it would not in any way change the sanction's architecture in place, but it would allow for essentially putting time on the clock because it would halt iran's program and rollback aspects of its program. if it doesn't do that, the united states won't agree to it. >> getting back for president clinton's comments, you were saying at the beginning of the briefing that the president does agree with what former president clinton said, but former president clinton did say, i personally believe even if it takes a change in the law the president should honor the commitment the federal government made. the president agrees even if it
takes a change in the law -- >> what i just said, jim, is that the president has instructed his team to look at a range of options. we haven't announced one way or the other. all he though understandably you and others -- although understandably you and others ask us for details what is under consideration. we haven't announced any potential fixes or moves that we might be able to make to address this problem, but the president, as you heard him say in his interview with nbc, he's very interested in trying to address this problem. and looks forward to being presented the options that he might be able to pursue. >> the situation where you're trying to help people keep the plans they have now, what you
might be putting the tooth pace back in the tube and hundreds of thousands, perhaps millions of americans have received these notifications already. how do you go back and allow those people to keep those insurance plans? that seems practically impossible. >> what i would say is i'm not going to get into specifics about avenues that might be available to the president to address this problem until he's chosen which option he wants to pursue. the broader thing that we have to remember here is that the overall majority, overwhelming majority of the american people, either get their insurance through their employers, and will not see a change, get their insurance through medicare or medicaid, or the v.a. and will not see a change, except for those changes that improve the coverage they get and improve the benefits they get. they apply to everyone. not just those who purchase plans in the marketplaces. others as you know because some states have made the decision to help their own constituents, their own people, by expanding the medicaid program under the affordable care act will extend insurance to hundreds of thousands, millions of americans who will become duly eligible for medicaid and others will be able to find an array of options available to them for purchase through the marketplaces. that effort in terms of the shopping period have been made more difficult, frustratingly so because of the problems with the website, but there is a team
focused daily, seven days a week, on making improvements to the website so the american people have a better experience while they are shopping for plans and registering and enrolling for coverage. >> getting back to the interview the president did with nbc, he apologized to people losing their coverage despite the assurances he gave. but what about whether or not the statement itself was misleading, if you like your plan you can keep it. the senate with dick durbin was on cnn earlier today he said that perhaps a couple of sentence has been added to the end of that pledge, that might have clarified things. does the president agree with that? >> the president gave a pretty extensive interview which this was the essential topic of discussion. he obviously expressed regret about the fact that the law has not addressed some of these individuals the way that he would like. and therefore he has asked his team to come up with some solutions that he can review. so the overall effort here has to be on implementing the
affordable care act, standing up to marketplaces so that these millions of americans are presented with the far better options that the affordable care act allows them for affordable, quality health insurance, for many of whom that's something that's been out of reach for a long time. and he is focused on getting it right because it is a fact come january 1 there will be millions more americans with insurance coverage who didn't have it before. and there will be millions -- other millions of americans who will have higher quality insurance than they had before. they won't be subjected to a marketplace in which insurers could charge juliana double for
the same plan you got because she's a woman. they can't put a lifetime or annual cap on the benefits that you receive. they can't carve out exemptions for certain conditions, chronic conditions that you might have that you might need benefits to cover. that is the underlying purpose of the affordable care act to make sure there is a structure in place that creates higher competition under the private sector model that we have had. keeps down prices, and allows millions of americans to get access to affordable quality insurance and health care that they have not had in the past. >> the enrollment numbers, is the administration confident those numbers will be accurate given all the problems with the insurers being able to sort through the data and figure out which applications are correct and properly submitted and so forth? >> they are going to work very hard over at c.m.s. and h.h.s.
to compile the data and present the most accurate data available. i think that's a good question in light of the fact that some on capitol hill have been demanding data daily. we have made the point that consistent with the release of data for other programs that is in the interest of everybody to do this on a monthly basis so the data is as accurate as possible. john? reacted to bill clinton's remarks. speaker boehner said that president clinton understood that governing in a divided washington requires a focus on common ground and he hopes that president obama will follow the former president's lead. you can find that on c-span.org theooks tv looks back at
life and death of our resident on the anniversary of his assassination. plus, and authors panel. it is part of book tv this weekend. book club forthe november. we want to know which kde books you are reading. -- have and budget meeting. we are joined from capitol hill. isce the last meeting, what on the agenda next and what do they have to get done first. >> it will be interesting. the meeting will include an feature the director of the
congressional budget office and he will give an update on economic growth and so forth. his appearance is a bit of a filler. it is not clear that they need him to go to the budget again. everyone knows the issues and everyone is well briefed on the economic outlook. it will be one more chance to lay out the broad for amateurs. will be most interesting is --tening -- for amateurs parameters. interesting to see who is listening. the parties have been divided. major entitlement reform. to get any kind of serious agenda agreement, both parties will have to give and we have
not seen any indication that there is a broad-based desire to give on behalf of the democrats or the republicans. >> another part is the banking committee on janet yellen. what will she be questioned on? one that willing have financial markets on edge is listening to her explain how the fed will begin unwinding its policy and unwind the aggressive monetary easing that they have in thisng since 2008 time of slow growth. fedle want to know how the is going to return to a more normal interest rate policy. not -- has sort
of signaled that there are a number of ways that the fed could do so what has not committed because the economy has been so sluggish and it now appears to be picking up strength. there will be a lot of questions to janet yellen on how the fed will shift gears. will be questions on fiscal policy. the chairman of the federal reserve board is your major economic spokesperson for the country. perhaps the focus has been too much on spending cuts and austerity, rather than economic growth. they will try to drag her into the fiscal debate. usually, ricky has been very skilled about not getting to
dragon to the details of fiscal policy. to the details of fiscal policy. as you mentioned, the house oversight committee will be holding another hearing on the problems of the new health care website. theill be subpoenaing administration official, todd park. the administration has been reluctant. democrats think this is a show darrell issahat should allow mr. park to stay at work. there will be a lot of back and forth and a lot of controversy. the democrats and this is a show hearing and do not think this is an attempt to get to the bottom of the problem. thehat is not a show is
effort to pass a law to keep people with their health insurance. that is getting steam in the house and with some democrats. >> it is gathering steam. steny hoyer was asked at his briefing about that. his response was that he hopes that the administration is coming up with some ideas and plans that would not -- that would allow democrats to support something other than the bill that mr. upton is drafting. have dropped insurance policies and they feel they need to have an alternative. some have drifted towards the upton bill. house democratic leadership wants to put up an alternative that democrats can migrate to. >> john boehner is using president clinton's words and
calling for a delay and allowing people to keep their health care plan. >> this continues to put pressure on the white house. from the perspective of democratic leadership, they need to introduce an alternative plan and administrate -- administer an alternative ruling for a couple of days to a loud democrats to move towards that rather than vote on the often bill. democrats do not want to vote against the upton bill without any sort of alternative. shaw is a correspondent for market international. thank you for being with us. senate budget negotiation have a second meeting tomorrow. doug. span-thr 3ve on c-
thanks for everyone's patience this morning. reassembling now. it's a huge pleasure and an honor to have senator warren joining us as our final speaker. i'll be very brief because she really truly does not need any introductions and to leave time for her remarks. let me just say that senator warren's leadership was at the heart of the creation of the consumer financial protection bureau which was a accomplishment of financial reform so far. and her continuing focus on holding wall street and wall street's regulators accountable to working families gets to the heart of the task ahead as well. to many of the issues that people described in their remarks today. the financial crisis and the economic crisis that followed have made it sadly obvious in many, many people's lived experience that the rules and design of the financial system may look obscure, complicated, off to one side but they in fact have enormous consequence for
all of us. what senator warren does so remarkably, her clarity penetrating that on security and her tenacity for main street makes it easier to be hopeful that together we can actually do something about a number of the things that people talked about today and change that for the better so thanks so much for talking with us today, senator. \[applause] >> so thank you. it is great to talk to a group of people that want financial reform. it's important. it's something we need to talk about so i'm delighted to be here. i'm delighted to look and see so many good friends, so many people with whom we fought shoulder to shoulder. throughout the dodd-frank efforts and after that in the regulatory efforts and continue that battle today. so i want to start this by saying a very big thank you to americans for financial reform and to the roosevelt institute for inviting me to speak today.
i've been working closely with a.f.r. and with roosevelt and i am delighted to be here. it has been five years since the financial crisis, but we all remember its darkest days. credit dried up, the stock market crashed. historic institutions like lehman brothers and merrill lynch were wiped out. there were legitimate fears that our economy was tumbling over a cliff and we were heading into another great depression. we have heard of that grim outcome, but the damage was staggering. a recent report by the federal reserve of dallas estimated that the financial crisis cost us upwards -- are you ready? cost us upwards of $14 trillion. that's trillion with a t. that's $120,000 for every
american household. more than two years of -- worth of income for the average family. billions of dollars in retirement savings disappeared. millions of workers lost their job and their sense of financial security. entire communities from devastated and a new census bureau study shows that just a couple months ago showing that homeownership rates for families with young children have declined by 15%. the crash of 2008 changed lives forever. in april, 2011, after a two-year bipartisan inquiry, the senate's permanent subcommittee on investigations released a 635- page report that identified the primary factors that led to the crisis. the list included high-risk mortgage lending, inaccurate credit ratings, exotic financial products and, to top it all off, the repeated failure of regulators to stop the madness. as senator tom coburn, the
subcommittee's ranking member said, blame for this mess lies everywhere from federal regulators who cast a blind eye, wall street bankers who let greed run wild and members of congress who failed to provide oversight. even jamie diamond, the c.e.o. of jpmorgan chase, has emphasized that inadequate regulation was a source of the crisis. he wrote this to his shareholders. had there been stronger standards in the mortgage market, one huge cause of the recent crisis might have been avoided. the crash happened quickly and dramatically and it caught our nation and apparently even our regulators by surprise. but don't let that fool you. the causes of the crisis were years in the making, and the warning signs were everywhere.
as many of you know, i spent my career studying the growing economic pressures on middle- class families. families that worked hard and played by the rules and still can't get ahead. and i've also studied the financial services industry and how it's developed over time. a generation ago, the price of financial services, credit cards, checking accounts, mortgages, signature loans, was pretty easy to see. both borrowers and lenders understood the basic terms of the deal. but by the time the financial crisis hit, a different form of pricing had emerged. lenders began to use low advertised prices on the front end to entice their customers in and then made their real money with fees and charges and penalties and repricing back in the fine print. borrowers became less and less able to evaluate the risk of the financial product, comparison
shopping became almost impossible. and the market became less efficient. credit card companies took the lead with their contracts ballooning from a page and a half back in 1980 to more than 30 pages by the beginning of the 2000's. and teaser rate credit cards that advertised these deceptively low interest rates paved the way for teaser rate mortgages. now, when i worked to set up the consumer financial protection bureau, i pushed hard for steps that would increase transparency in the marketplace. the crisis began one lousy mortgage at a time, and there's a lot we must do to make sure there are never again so many lousy mortgages. the cfpb made some important steps in the right direction, and i think we're a lot safer now than we were then. but what about the other causes of the crisis?
there's no question that dodd- frank was a strong bill, the strongest in three generations. i didn't have a chance to vote for it because i wasn't in the senate yet, but if i'd had the chance i would have voted for it twice. i would have. but the law is not perfect, and so it's important to ask, where are we now five years after the crisis hit and three years after dodd-frank? now, i know there's been a lot of discussion today about a variety of issues, but i want to focus on one in particular. where are we now on too big to fail? where are we on making sure that the behemoth institutions on wall street can't bring down the economy with a wild gamble? where are we on ending a system that lets investors and c.e.o.'s
scoop up all the profits in good times and then stick the taxpayer with the losses when things go wrong? you know, after the crisis, there was a lot of discussion about how too big to fail distorted the marketplace, creating lower borrowing costs for the largest institutions and a competitive disadvantage for the smaller ones. there was a lot of talk about moral hazard and the dangers of big banks getting a free unwritten government guaranteed insurance policy. sure, there was talk, but look what happened. today the four biggest banks are 30% larger than they were just five years ago. and five largest banks hold more than half of all the total banking assets in the country. one study earlier in year showed that the too big to fail status is giving the 10 biggest u.s. banks an annual taxpayer subsidy of $83 billion.
wow. who would have thought five years after the crisis that we witnessed firsthand the dangers of an overly concentrated financial system that the too big to fail problem would only have gotten worse? now, there are many who say, sure, too big to fail isn't over yet, but congress should wait to act further until the agencies have had a chance to issue a lot of the dodd-frank required regulations. and it's true, there are still rules left to be written and that's because the agencies have missed more than 60% of their statutory deadlines. now, i don't understand this logic. since when does congress set deadlines which regulators then miss most of them and then take that failure as a reason not to
act? i feel like if the regulators failed it was time for congress to step in. that's what oversight means and that's certainly a principle that would have saved our country during the financial crisis. so let's put the pieces together. think of these two things. it has been three years since dodd-frank was passed, and the biggest banks are bigger than ever, the risk to the system has grown and the market distortions have continued. and second, while the consumer agency has met every single statutory deadline, so we know it's possible to get the job done, the other regulators have missed their deadlines and not given us much reason for confidence. the result is that the too big to fail problem remains. now, i add there up and it's
clear to me -- i add that up and it's clear to me. the last thing we should do is to wait for another crisis, for another london whale or another disgrace or another robo signing scandal before we take action. i partners with senator mccain, cantwell and king to offer one potential way to address the too big to fail problem, the 21st century glass-steagall act. by separating depository institutions from the riskier financial institutions, the 1933 version of glass-steagall laid the groundwork for half a century of financial stability. but throughout the 1980's and 1990's, congress and the regulators chipped away at glass-steagall's protection, encouraging the growth of the megabanks and a sharp increase in systemic risk.
they finally finished that task with the 1999 passage of gramm- leach-bliley which eliminated glass-steagall. it would reinstate many of the protections found in the original glass-steagall act it would wall off depository institutions from riskier activities like investment banking, swaps dealing and private equity activities. it would force some of the biggest financial institutions to break apart and eliminate their ability to rely on federally insured deposits as a backstop for their high-risk activities. in other words, a new glass- steagall act would attack both the too big and to fail. it would reduce the failures of the big banks by making banking boring by protecting deposits
and providing stability to the system even in bad times. and it would reduce too big by dismantling the behemoth so that big banks would still be big but not too big to fail or for that matter too big to manage, too big to regulate, too big for trial or too big for jail. big banks would once again have an understandable balance sheet, and with that would come greater market discipline. sure, the lobbyists for wall street say the sky will fall if they can't use deposits in checking -- and checking accounts to fund their high-risk activities, but they said that in the 193030's too and they were wrong then and they are wrong now. the glass-steagall act would restore the financial system that began to disappear in the 1980's and 1990's. now, this is one way to deal with too big to fail.
and i think it would work. and i am very grateful to a.f.r.'s continued push to make at that reality, but there are other approaches too. so what i want to know is this how much longer should congress wait for the regulators to fix this problem? another three months, another three years, or until the big banks crash the economy again? treasury secretary jack lew recently said if too big to fail is still a problem at the end of the year, it might be time to consider other options. anyone counted how close we're getting until the end of the year? now i applaud secretary lew for laying out a timeline and i'd like to see the other administration officials and regulators to follow suit. if dodd-frank gives the regulators the tools to end too big to fail, great. end too big to fail. but if the regulators won't end too big to fail, then congress must act to protect our economy and prevent future crises. we should not accept the
financial system that allows biggest banks to emerge from a crisis in record setting shape while working americans continue to struggle. and we should not accept a regulatory system that is so besieged by lobbyists for the big banks that it takes years to deliver rules and then the rules that are delivered are often watered-down and often ineffective. what we need is a system that puts an end to the boom and bust cycle, a system that recognizes, we don't grow this country from the financial sector. we grow this country from the middle class. powerful interests will fight to hang on to every benefit and every subsidy they now enjoy. even after exploiting consumers larding their books with excessive risks and making bad
bets that brought down the economy and forced taxpayer bailouts, the big wall street banks are not chastened. they have fought to delay and hamstring the implementation of financial reform and they will continue to fight every inch of the way. that's the battlefield. that's what we're up against. but david beat goliath with the establishment of the cfpb, and just a few months ago with the confirmation of rich chord ray. david beat goliath with the passage of dodd-frank. we did that together. americans for financial reform, the roosevelt institute and so many of you in this room. i am confident that david can beat goliath on too big to fail. we just have to pick up the slingshot again. it's good to see all of you here.
thank you. \[applause] thank you. thank you. thank you, dear. let me just make sure. i never own my own schedule. do you want to do questions for just a minute? is that ok? holding up two fingers which i think means two questions. >> so there's a microphone on the side. people could introduce themselves and ask their question briefly, that would be wonderful. >> ok. thanks, lisa. >> hi. i was hoping you could talk about the part of the glass- steagall bill that takes away derivatives seniority during bankruptcy. i was hoping you would elaborate why you put that in there. >> so the reason that is in there, as some of our bankruptcy
efforts in the room know, is that in effect what the current provision does in the bankruptcy laws is that it permits a certain group of creditors just to opt out, to get a first priority if one of the financial institutions collapses. and let's be clear. i want everybody to follow what this means. in means that they don't have to have any market discipline. they don't have to watch to see whether or not when they're lending to one of the giants, whether or not that giant is in good financial shape, what the balance sheet really says about the risks they've taken on and how they're making their profits. it's another form of too big to fail. i just want to be clear here. it's not something that exists with the small financial institutions. and that's why this is so fundamentally wrong. we perpetuate too big to fail which puts the taxpayers at risk, but what it also does is put every financial institution that's not in that category at a competitive disadvantage.
nobody lends money to them. nobody advances capital to them without a very careful scrutiny of whether or not they're going to be able to pay back. but the big guys are able to walk away for free and that's wrong. thank you. it's a good question. >> i count myself among your biggest supporters and thank you for everything you do. >> thank you. >> i believe that there is still a law that prohibits any bank holding more than 10% of total deposits in the u.s., and i believe that's the last few years, three or four biggest institutions have gone above and that congress has been granting them exceptions. now, americans differ in their beliefs but most of us believe this is the country of laws. and most of us don't like exceptions to obeying the law. how easy would it be to just stop that? >> that's a very good way to put it. as you were saying it.
you were saying i thought you had a rule and i was thinking, i don't think we do have such a rule any more because we have been creating this rolling exception to the rule so no one actually has to follow the rule. but you are right, and what it's a reminder of is that too big to fail is a problem that stretches across our economy. it's all the way through the financial system, but it has implications throughout the economy. the ways to attack too big to fail are many. there's not a single magic bullet to this. there are lots of ways to go after it. i propose, along with john mccain and with our other co- sponsors one way to do that and
i think it would help, but there are other ways we need to be thinking about as well and the question on limitations on deposits and the proportion of deposits is just one more way to get at that problem. there was a policy reason for passing in a law in the first place. and that is that congress understood initially that too much concentration in the banking industry was bad for the economy, there it ran too much risk for the taxpayers and it was bad for competition in the banking industry. that's the kind of fundamental values we got to get back to. we got to get back running this country for america's families, not for its largest financial institutions. thank you. thank you, all. thank you. \[applause] [laughter] >> massachusetts senator elizabeth warren was part of a senate panel requesting to handle the consumer